The Principal-agent theory of the main stream economics fails to explain employees' altruistic behavior towards their organization, while organizational identification theory and identity economics can provide reasonable explanation. By integrating related theories and research, this study has the following findings: Organizational identification can reduce employees' cognition and decision cost, help enhance their subjective well-being, and thus have intrinsic motivation and regulating effect on their behavior. The externality of organizational identity makes organizational members monitor, motivate and constrain each other's behavior to maintain its value, and thus enables organizational identification to have extrinsic motivation and constraining effect on employee behavior. The following conclusion is drawn: under information asymmetry, organizational identification can overcome the unsolvable problem of employees' opportunistic behavior with the principal-agent mechanism, also help reduce organizational monitoring, motivating and constraining cost by its intrinsic and extrinsic motivation and constraining effect on employee behavior, thus is a more effective mechanism than the principal-agent mechanism.
Key words
Organizational identity /
Organization identification /
Motivating /
Constraining /
Principal-agent theory
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References
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